Part 2 – Redesigning your budget process: System selection

By - January 6, 2016

In part 1, Redesigning your budget process, I discussed the needs assessment of a U.S. based manufacturing company’s budget process and their decision to select a budget solution. Their primary drivers were heavily leveraging excel, a many month timeline, laborious processes and difficulty to maintain credibility in the process. These reasons may sound familiar, as they are often near the top of the list when people look for budget solutions.

Through the needs assessment we met with representatives from the key budgeting areas to outline the existing and desired future process, long term organizational strategy and non-negotiable items with a focus on optimization, automation and moving beyond the, “way we’ve always done it.”

The system selection was done in three phases:

  1. Researching potential vendors: Who are the vendors to whom you’ll send the RFP?  Selecting vendors often starts with who you know, software you or friends have used at prior companies, or you’ve seen at user groups. It’s important to check with your solution providers to see what they offer, it may streamline integration and you may have a solution in your current software that meets your needs. Ideally, you want to send the RFP to a limited number of vendors so you can make a good decision. Vendor selection is a bit like buying a new house, it’s fun to look at lots of choices online but you need to narrow your scope to what you really need or can afford before you start looking in real life.
  2. Developing the RFP: What do you need to know about the vendor?  The RFP allows you to define your needs in a straight forward manner, both the must and nice to haves. You want to include things the vendors need to right size their solution such as volumes, users numbers and end goals. You also want to take this opportunity to get to know the vendor, this is your first introduction into them. Are they sustainable, size, security, BCP/DR, number of clients, references, total cost of ownership?
  3. Evaluating proposals: How do we review data?  No matter how detailed you are in your RFP, rarely does the data align perfectly amongst the respondents. Creating a side-by-side analysis, although tedious, is invaluable and often the only way your team will reasonably review the data.

In this case we were able to narrow our vendor choices to three with relative ease due to the team’s prior experiences, the need to integrate with the core application and specific non-negotiable items. Meeting as a cross functional team to review and give everyone a voice through the process creates ownership with those that will be required to use the tool long term.

In part three of this series, I will address the due diligence phase. In the meantime, to learn more about how RSM can assist you with your other business needs, contact RSM’s management consulting professionals at 800.274.3978 or email us.

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